Costs of starting a clothing company

Written by Ray Masaki

So you want to start a clothing company, but you have no idea where to begin? You’ve come to the right place! Starting a clothing company requires a great amount of preparation and research so after you read this article, be sure to also read up on many other resources.

Note: This article was written a few years ago. You can download my How to start a clothing line: Lean Startup Guide to get more uopdated information. This guide is all about getting you up and running as cheap and fast as possible so you start learning and being profitable. Just click here and I’ll send you the guide.

How much do I need to start my clothing brand?

This is a HUGE question that I get asked a lot. And the simple answer is that there is no answer. Of course, I could give you an estimate based on your products and what you’ll need and what not, but ultimately there’s no way that I can just say that you need X amount of dollars to start Y company.

So let’s break it down a little bit to help you assess your business and how much money you will possibly need.

The way I personally think of it is that there are pretty much three types of companies. There’s the amateur brand, the indie brand, and the professional brand. Each of these types of brands has a range of startup costs. Take a look at the list below and try to assess what type of brand your company is.

Amateur:

You started the brand on a whim just as a hobby.

You might have a few products that are printed on cheap material.

You don’t plan to expand your brand.

You mostly sell your products to friends and family.

You may have an online store/social media page to do some simple promotion.

You’re not recognized by the state, and you don’t pay sales tax.

Indie:

You want to get your brand out there but you don’t have the proper funds.

You have a few good designs and you have the money to buy designs from other designers.

You care about the quality of your products but don’t have enough money to get them custom made.

Professional:

You have many products and plan to release a whole array of apparel from shirts to denim to jackets.

You care about the quality of your products and get most of your products custom made.

You want to start a brick and mortar store and plan to.

So as you can see, it should be pretty easy to see where you stand as a brand. Personally, I started out knowing that I am an indie brand and would have to work my way up. Being a student, I obviously don’t have the funds to do everything that I want to do, but I have many plans for the future if I do get the money I need.

Some Estimates

I’ll give very rough estimates of how much money each type of brand would need in terms of start-up cost. Keep in mind that these are just my personal thoughts, so these numbers should definitely be taken with a grain of salt.

Amateur:

$100-$300

Maybe you’re just trying to make a quick buck or you’re just doing this as a hobby, but you’re not serious about making your brand big. With $100-$300, you’re not planning on printing on the best quality t-shirts, and you probably do it in a very DIY fashion by printing the shirts yourself (check out the article why you should pay to have your products professionally printed). You also might be working with an on-demand DTG dropshipper like printful that will print and ship your products for you. You mostly just design shirts for yourself and for your friends and family. You don’t really have the money for any kind of advertisement, but word of mouth advertising is free.

Indie:

$500-$10,000

The range of start-up cost is a little larger on this one. You have plans to make your company larger, but you don’t have all the money to make it possible. With $500, you can probably print a good amount of shirts for a launch, and you plan to print more shirts as you make a profit and make a return. You don’t have quite enough money to pay the rent to a brick and mortar store, but as long as business goes well, it isn’t impossible to do in the future. Between $500-$2500, is probably where most indie brand owners land. You’ll have enough to get a solid group of shirts for your launch. And you’ll have enough money to possibly buy designs from artists and enough money to get a good website. There are many great free themes at Shopify that will make you look professional without spending a bunch of money. I have a longer article called the best e-commerce solution for your clothing line where I go into more detail about everything.

Professional:

$25,000 – $$$

Obviously these brands range from I’d say around 25k to the stars. If you plan to just get in the game and you have the money to do it, you can probably pay the rent to a really nice location and just get started. Of course, it’s much more difficult than I make it sound, but you really don’t have much of a limit when you have a lot of money. I recently read an interview about Kanye’s brand “Pastelle” and he said that he dropped a quarter million just to get samples for his new line. So that just gives you an idea of how much money you can potentially spend. Owning a professional brand means that you can comfortably maintain a company and you can release many products at one time per season.

About my brand

So let me tell you a little about my brand and a few things to think about when you’re starting a brand. I don’t usually like talking about numbers, but I’ll let you guys in on how much I started out. I was fortunate to be able to use all the money I had left over from my previous clothing company to start Lowdtown, but my startup cost was $2100. Mind you, this may cost a lot more for some people and a lot less for others.

A Few Things To Consider:

1. Do you know how to code and design a website?

If you responded NO to the question, you may have to consider hiring a professional web designer, which could be expensive. There are also tons of free and premium themes that you can customize to fit your brand at Shopify.

2. How many products do you want to have for your initial launch?

Ideally I wanted around five products but I couldn’t really afford it. If you think about how much a single shirt costs, and you think about your budget you should be able to figure out how many shirts you can buy. Also when you’re searching for a printer, there are so many options. Going with just the cheapest option usually means the quality suffers. Check out our recommended screen printer, they have amazing prints and great pricing options also.

3. How professional do you want your products to be?

The reason why my startup cost was so high considering the amount of shirts I bought was because I was really considering the quality and professionalism of my products. I used soft hand ink for my shirts. I printed my shirts on American Apparel, which are much more expensive than brands like Hanes or Gildan. I got custom printed size tags. I got custom embroidered labels. I got custom made hangtags. So factoring all those things in, it may really add up pretty quickly.

Depending on how serious you are about your business, this may be factored in. Today advertising is smarter than ever allowing you to pick the audience you want to see your ads. I would suggest everyone to first put money into remarketing through an app like adroll. What this does is send ads to the users that went to your site and left.

Why did they leave? There is a million reasons why.

Someone called them

They had to get back to work

The football game was on

Their dog was barking

Their house caught on fire

Really you will never know but by remarketing to them you can get them back to the site to make a purchase.

Conclusion

So those are a few things to think about when you’re starting your brand. Ultimately, it really depends on your brand and your products, so the startup cost is different for everyone. But also keep in mind, if you think you can break even quickly, it’ll definitely be worth it. Once you break even and you put that money back into your company, you basically have enough to reprint your products or print new ones. It’s all about balance!

Hopefully that gives you an idea of how much a brand costs to start. It certainly isn’t cheap, unless you want it to be. If you want to get serious about your products, you have to drop some money. The more money you spend, the better your products will be.

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